Judgments on the private economic activity of Swiss Post

In October 2020, Swiss Post acquired KLARA Business AG (now ePost Services AG), a private-sector company developing and distributing software in the fields of accounting, as well as customer and order management. In July 2021, Swiss Post took over Livesystems AG, a digital outdoor advertising company. Today, both companies operate as independent subsidiaries of Swiss Post.

Two complaints to the supervisory authorities
Both its subsidiaries ePost Services AG and Livesystems AG operate outside Swiss Post’s basic service mission. Swiss Post is thus in direct competition with private companies like Abacus Research AG and Goldbach Neo OOH AG, which both offer the same or similar services. These two companies filed separate supervisory complaints with the Federal Postal Services Commission PostCom and with the Federal Office of Communications OFCOM. They claimed before both supervisory authorities that the private economic activity of Swiss Post was unlawful. Both take-overs should be reversed, or action should be taken to avoid distortions of competition at least. Both PostCom and BAKOM dismissed the two supervisory complaints on the ground that neither company had party status with regard to the private economic activity of Swiss Post. Both competitors lodged appeals with the Federal Administrative Court (FAC) against the dismissal. 

Judgments of the Federal Administrative Court
In its judgments, FAC considers the case law of the Federal Supreme Court relating to the private economic activity of the State. It establishes that the economic freedom enshrined in the constitution does not offer the private sector any general protection against competition. The same applies to the State’s private economic activity that merely adds to the number of private-sector competitors. However, the constitution imposes limits on the private economic activity of the State: the activity must have a legal basis, and be in the public interest, proportionate, and competition neutral. In line with these requirements, the activity of Swiss Post is regulated and delimited by the Postal Services Organisation Act: Swiss Post is responsible for ensuring basic service and is thus entitled to provide the associated services. 

Against this backdrop, FAC further develops the existing case law. It establishes that party status cannot be acquired through a supervisory complaint as a basic principle. However, when private companies can demonstrate that a state-owned enterprise lacks an adequate legal basis for a given private economic activity, or that its behaviour is not competition neutral, as in the case at hand, the relationship becomes especially proximate. In such cases, private companies cannot be denied party status on a principal basis. PostCom has full responsibility for examining whether the private economic activity of Swiss Post complies with the constitutional limits. For these reasons, FAC upholds the appeals and refers the matter back to PostCom. PostCom must render a final ruling on the appellants’ party status. If necessary, it must also examine whether Swiss Post has sufficient market-access authority for its private economic activity.

These judgments may be appealed to the Federal Supreme Court.